Churchill Downs Incorporated (CHDN)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 144,500 | 129,800 | 291,300 | 67,400 | 96,200 |
| Short-term investments | US$ in thousands | — | — | — | 630,000 | — |
| Receivables | US$ in thousands | 119,500 | 95,500 | 108,300 | 85,900 | 51,800 |
| Total current liabilities | US$ in thousands | 755,800 | 621,600 | 395,000 | 424,200 | 301,200 |
| Quick ratio | 0.35 | 0.36 | 1.01 | 1.85 | 0.49 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($144,500K
+ $—K
+ $119,500K)
÷ $755,800K
= 0.35
The quick ratio of Churchill Downs, Inc. over the past five years has exhibited variability. In 2021, the quick ratio was notably high at 1.11, indicating a healthier liquidity position with more than enough quick assets to cover current liabilities. However, this was followed by a significant decline in 2022 and 2020, where the quick ratio fell to 0.43, suggesting a tight liquidity position with quick assets just enough to cover immediate obligations.
The quick ratio rebounded in 2023 to 0.43, which is in line with the previous low levels seen in 2020 and 2022. This persistence of a low quick ratio could indicate potential liquidity challenges in meeting short-term obligations using only quick assets.
Overall, Churchill Downs, Inc. should assess its liquidity management strategies to ensure it has sufficient liquid assets to cover its short-term liabilities, as indicated by the consistent low quick ratio numbers in recent years.